Overnight, while the US slept

A violent snap‑back rally: Wall Street reversed almost all of Wednesday's Fed‑day rout. The Nasdaq Composite surged 2.8% to 25,122.18, the S&P 500 climbed 1.7% to 7,437.64, and the Dow added 613.92 points (+1.2%) to 52,208.06, led by Microsoft posting a record one‑day gain in market value. Investors brushed off fresh US–Iran skirmishing and a rattled bond market and leaned back into big tech. After Wednesday's "worst day since April 2025," this is the mirror image — but note it's a bounce built on relief, not on a genuine all‑clear.

The reason it turned — a cooler inflation read: June core PCE (the Fed's preferred inflation gauge — it strips out food and energy) rose just 0.1% on the month and 3.3% from a year ago, while the headline rate eased to 3.7% from 4.1%, helped by the brief dip in energy prices earlier in the month. It's still well above the Fed's 2% goal, but it was softer than the market feared 24 hours earlier, and that took some of the sting out of Wednesday's hawkish‑hold panic.

Rates & DXY: The US 10‑year Treasury yield eased back toward 4.6% as the softer inflation print unwound a little of the bear‑steepening (long‑term rates rising faster than short‑term — the bond market's way of saying the Fed is behind on inflation) that dominated Wednesday. The dollar index (DXY — the greenback against a basket of major currencies) extended its post‑Fed slide to around 100.5, near a multi‑week low. A falling dollar with equities rallying is textbook risk‑on — but the yen tells a more complicated story.

The standout move — the yen roars back: USDJPY collapsed from about 163 to a low near 157.97 before steadying around 159.6 — a ~300‑pip surge in the yen and easily the biggest move on my screen. Some of that is the broad dollar decline, but the yen strengthened far more than everything else, which is a classic sign of carry‑trade nerves (see today's Jargon Term) ahead of the Bank of Japan decision. When the funding currency of the world's biggest leveraged trades jumps like this, it pays to watch it closely.

Gold: trading 4103.68/4104.02. Day range 4028.51–4120.48; prior‑day high/low 4116.56 / 3995.97. Gold has done almost nothing wrong — it ran roughly $120 off Wednesday's low, tagged 4120 overnight, and is consolidating just beneath that high. RSI on the 15‑minute chart (a momentum gauge from 0–100; above 70 is "overbought", below 30 "oversold") sits at 50.9 — dead neutral, which after a move this size is constructive, not exhausted. The framework still favours the bulls: we have a supply‑side oil shock (a conflict lifting energy costs and inflation) but a Fed that declined to fight it, so real rates (interest rates after subtracting inflation — gold's main enemy) aren't rising to cap the metal. The one soft spot is yesterday's cooler PCE, which nibbles at the inflation‑fear leg of the trade. My read: still constructive, and I'd rather buy a dip than chase.

Crypto: Bitcoin 64,682 (RSI M15 47.6, ATR — average true range, a gauge of typical bar‑to‑bar movement — $110); day range 64,600–64,739, prior‑day high/low 65,096 / 63,120. BTC rode the risk rebound back above 64k and is holding it. Ether 1,917.9 (RSI M15 46.1, ATR $5.4); day range 1,912.97–1,921.82, prior‑day high/low 1,934.02 / 1,872.22. Ether is the laggard again — it's stuck under 1,934 while Bitcoin looks healthier, and it bounced twice this week off almost exactly the same 1,872–1,875 shelf. That shelf is the whole story for ETH right now.

Key FX:

• EURUSD 1.15244 — RSI 53.1 (neutral), ATR 3.6 pips. Day H/L 1.1527 / 1.15229; prior‑day H/L 1.1537 / 1.14344. The euro travelled a full figure on the weak dollar and is now consolidating just under yesterday's high. Strong trend, catching its breath.
• GBPUSD 1.34615 — RSI 55.5, ATR 4.9 pips. Day H/L 1.34676 / 1.34599, prior‑day 1.34768 / 1.3333. Same story as the euro, one notch weaker.
• USDJPY 159.614 — RSI 47.1, ATR 13.0 pips. Day H/L 159.636 / 159.424, prior‑day 163.74 / 157.97. Look at that prior‑day range — nearly six full figures. This is the most important chart on the board today, and it's a coin toss until the BoJ speaks.
• AUDUSD 0.70247 — RSI 54.7, ATR 3.6 pips. Day H/L 0.70271 / 0.70178, prior‑day 0.70334 / 0.69463. Back above 0.70 on the weak dollar, but the Aussie is being carried by the greenback's weakness rather than any love of its own.
• NZDUSD 0.58735 — RSI 50.8, ATR 5.4 pips. Day H/L 0.58759 / 0.58422, prior‑day 0.58834 / 0.57856. Reclaimed 0.5870 in the euro's wake.
• USDCHF 0.80516 — RSI 44.0, ATR 5.4 pips. Day H/L 0.80634 / 0.80473, prior‑day 0.8175 / 0.80393. The franc has done a huge amount of safe‑haven work already; the easy part of that move is behind us.

Cross‑asset snapshot:

Asset	Now	vs Prior Close	Vector
S&P 500	7,437.64	+1.7%	Risk‑on rebound
US 10Y	~4.6%	Eased on soft PCE	Slightly less hawkish
DXY	~100.5	Extending post‑Fed slide	USD offered
Gold	4,103.68	Holding near 4,116 prior‑day high	Bullish — real‑rate channel still blocked
Bitcoin	64,682	−$414 from prior‑day high (65,096)	Firm, back above 64k
Brent	~$89.03	−~2%	Saudi naval‑coalition proposal eased fears

Context: month‑end today, so expect some rebalancing noise in the fixes, and thin, headline‑sensitive conditions around the BoJ. Don't over‑read the first knee‑jerk.

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